Politics from the Palouse to Puget Sound

Friday, November 04, 2005

Eight Days of Truth - Day Five

We stay in the Midwest today, stopping in Sandusky, MI, where a Wal-Mart Supercenter just opened a couple of months ago. Much fear-mongering was going on in this small town of 2,750. But this Port Huron Times-Herald article from November 1, 2005, clears away the hype and gives us the truth:
Fear of big-box stores mostly a bust

Merchants: Chains have not hurt much

Times Herald

When Wal-Mart first announced its plans to build a store in Sandusky, owners of local businesses feared bleak, dire predictions about their futures.

They feared customers, looking for the convenience of one-stop shopping, would choose the box-store giant instead of local retailers.

The same fear was present for many business owners in Marysville when Meijer announced intentions to build a destination shopping center at Range Road and Gratiot Boulevard.

Now - several months after both stores opened to eager customers - people at several locally owned businesses in both communities haven't seen much of an impact.

Many are more optimistic than ever they can co-exist with the big-box stores and can find a way to capitalize on the new shoppers rolling into town.

Some experts said that attitude may be key to survival and may have been invoked to prevent self-destruction.

"(Business owners are) spending more time and more effort to bring people in," said Laura Crawford, executive director of the Marysville Chamber of Commerce. "They're working harder to serve customers and change with the marketplace."

Meanwhile, plans move forward for new Wal-Mart Supercenters in Fort Gratiot and Marine City.

Fear subsides

Sandusky, the government seat of Sanilac County, had avoided the big-box store craze.

That changed Aug. 24 when the Wal-Mart Supercenter swung open its doors to 155,000 square feet of shopping space east of downtown.

Longtime business owners were nervous about what Sam Walton's brainchild would mean in a city of about 2,750 people.

"They (critics) told us to expect to lose 25% of our pharmacy business," said Bobbi Frohner, manager of the Sanilac Pharmacy on Elk Street.

More than two months later, it's hard to see that same apprehension from the city's business community.

"We've lost seven people (from the pharmacy)," Frohner said. "I think there was a lot of hype in the beginning. If nothing else, I've had people come to the store..who obviously haven't been here before."

Several other businesses have had similar experiences. More traffic coming from out of town has helped balance any lost sales - and added to the customer base.

Dawn Smith, whose Ace Hardware is on Sandusky's main downtown route, continues to see familiar faces frequenting the aisles of her store - as well as a few new shoppers.

"The local people have really supported the local businesses in the community," Smith said.

Adam Innes, a service technician at Dalton Computers, agreed.

"It's a loyalty thing," Innes said. "(Customers) know they're going to get what they want and know where it is."

Learning to survive

Long before Meijer opened its 206,000-square-foot Marysville store June 14, the business community began preparing for its arrival.

Crawford, the chamber director in the St. Clair County city of about 9,680 people, had been working to help business owners plan for the added competition.

Crawford's aim was to teach businesses the tools they would need to survive. Examples included stressing things such as the importance of properly setting inventory levels and realigning merchandise.

For the most part, everyone has made it through the first four months, she said.

While some parking lots are "more sparse" than before Meijer's grand opening, many businesses owners have reported feeling less of an impact than expected.

"Business owners that I have talked to that feel the effect of losing market share, so far, are happy because they've lost 20% or less," Crawford said. "If a business only loses that much revenue, it's a good thing in their ability to survive with (a box store)."

Rex Harcourt, a president of the Carter's grocery-store chain, said there's no doubt the company's Marysville store has felt the impact of direct competition.

Aside from clothing, electronics and toys, Meijer also sells food.

Harcourt would not say how much business the store has lost but said some changes, including marketing, are in the works.

"We're a grocery store next to a grocery store, so it's naturally not positive," he said. "Any competition, you're concerned (about)."

Chuck Keeler, who owns The Mulberry Bush Hallmark Gold Crown Store, said his store will continue to offer items Meijer doesn't carry.

Keeler remodeled, expanded and moved his business closer to Gratiot Boulevard. He hasn't felt - and isn't expecting - a big backlash from Meijer's presence.

"The type of gifts selections we carry in the store are completely differing than what the Meijers and the Wal-Marts carry," Keeler said. "When we were researching (Meijer opening), we thought it would be nothing but a positive for us."

Looking ahead

Businesses in Sandusky and Marysville likely have had all the time they will need to gauge the long-term effects superstores will have their community, one expert said.

Eugene Fram, a J. Warren McClure Research professor of marketing at Rochester Institute of Technology in New York, for several years has been studying big-box stores.

A loss of business from a new opening doesn't take months to build, Fram said. Rather, the impact almost always is immediate.

That doesn't mean, however, businesses initially will be honest about what they are seeing at the registers, Fram said.

Some will put on a positive face for the public while noticing a decline in sales. Others will not admit defeat even to themselves.

"Some of the smaller businesses will not admit to it because then it becomes a self-fulfilling prophecy," Fram said. "(Owners) can be in denial themselves..saying (the new superstore) may not be the cause."

1 comment:

April E. Coggins said...

As a small business owner in Pullman, I can assure you that I see a loss of customers when they shop in another town. It is almost impossible to attract shoppers to my store if they are shopping in Moscow. I would rather compete with Wal-Mart in Pullman than compete with Wal-Mart in Moscow.